Change In Pension Rules Proposed

March 23, 1985

The Financial Accounting Standards Board issued tentative rules that would change the way companies must account for pension plans. As expected, the draft proposal calls for companies to include pension assets or liabilities on their balance sheets, rather than the current practice of noting them in footnotes. The document also would require all pension expense accounting to be done by one method, called the projected unit credit method. The proposals also would require companies to consider salary scale and assumed interest rate in choosing actuarial assumptions for their plans. If the rules are approved, companies must change pension expense accounting methods for years beginning after Dec. 15, 1986, and for balance sheets by Dec. 15, 1989.